Digital lending platform NeoGrowth has raised Rs 85 crore ($8.8 million) through a mix of debt and equity funding to expand its digital lending capabilities and increase credit access for micro, small and medium enterprises (MSMEs). 

The funding round was led by Dutch development finance institution FMO, with participation from existing investor LeapFrog Investments. The company plans to use the capital to grow its loan book and strengthen its presence across India.

Founded in 2012 by Dhruv Khaitan and Piyush Khaitan, NeoGrowth provides loans to small businesses across more than 75 business segments. Its customers include retailers, restaurants, cafes and other businesses that often face challenges in securing formal credit from traditional banks.

The company provides collateral-free loans ranging from Rs 5 lakh to Rs 75 lakh through products such as NeoCash, NeoCash Insta and NeoCash Express. It also provides flexible repayment options, including daily repayments, to suit the cash flows of small businesses.

NeoGrowth currently manages assets under management (AUM) of nearly Rs 2,000 crore and has engaged with more than 4 lakh businesses. It has disbursed over Rs 16,000 crore in loans since its inception. During FY26, the lender added 17 branches, taking its total network to 46 locations across India.

The company is also using artificial intelligence to improve its lending operations. Its proprietary AI-based systems support credit assessment, portfolio monitoring and risk management. These tools can help lenders evaluate borrowers more efficiently, identify potential repayment risks and make lending decisions based on available business data.

According to reports, the fresh funding could help NeoGrowth expand its loan book towards Rs 3,000 crore before it requires another equity infusion. The company is also considering a larger equity fundraise of around Rs 500 crore in 2027.

The investment comes as digital lenders and non-banking financial companies step up their focus on India’s MSME sector. Small businesses often find it difficult to secure traditional bank loans due to limited collateral, uneven cash flows or a lack of credit history.

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